Rupee opened the week in green but tumbled sharply to register its new record low, falling past the 95 mark against the greenback. Around 3 pm, the currency fell to 95.08 against US dollar. The currency had earlier climbed to 93.57 against the US dollar, on Monday, gaining 128 paise from its previous close, after opening at 93.62 in the interbank foreign exchange market. This comes days after the currency had hit a record low of 94.85 on Friday, following a steep fall of 89 paise.Earleir, on March 27, the Reserve Bank of India placed a cap of $100 million on the Net Open Position (NOP-INR) that banks can hold overnight. Lenders have been asked to comply with the new limit by April 10. Market participants said the move is prompting banks to reassess their positions, particularly those with long dollar holdings in the onshore market. As these positions are reduced, dollar sales are expected to increase, lending short-term support to the rupee.“As banks begin adjusting their positions, they are likely to sell dollars in the market, which can temporarily support the rupee. This creates a phase of relief, driven by position unwinding, not by a major shift in fundamentals, but still meaningful in the near term,” Amit Pabari, Managing Director at CR Forex Advisors told PTI.Even so, the broader environment remains challenging for the Indian currency. The dollar continues to draw strength from safe-haven demand, keeping the dollar index above the 100 mark and restricting any sustained appreciation in the rupee.The dollar index was last seen marginally lower by 0.06% at 100.09. At the same time, rising crude oil prices are adding to pressure, with Brent crude trading 2.16% higher at $115 per barrel in futures.Geopolitical tensions have played a key role in pushing oil prices higher amid concerns over supply disruptions. “For India, this is critical. Being a major oil importer, higher oil prices increase dollar demand, which directly puts pressure on the rupee,” Pabari said.He added that despite the current relief, the rupee’s outlook remains sensitive to global factors such as oil price movements, geopolitical developments and the strength of the US dollar.Dalal Street also reflected the cautious mood, with the BSE Sensex dropping 1,191.24 points to 72,391.98 in early deals, and the Nifty 50 declining 349.45 points to 22,470.15.
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Foreign institutional investors were also seen pulling back, having sold equities worth Rs 4,367.30 crore on a net basis on Friday, as per exchange data.
